B.C. puts brakes on $40-million BC Place renaming deal with Telus

There are no large visible signs for BC Place in Vancouver on Tuesday, March 08, 2012. Telus has been told it cannot buy the naming rights to BC Place.

Photograph by: Les Bazso
, PNG

VANCOUVER - After nearly two years of negotiations, the provincial government has cancelled a proposed $40-million deal with Telus to rename BC Place Stadium.

The deal fell through after the provincial cabinet balked at renaming the iconic stadium Telus Park, even though market research done by the B.C. Pavilion Corp. and Telus showed public support for renaming the facility if the money would go toward paying down the $563-million cost of renovations.

And it throws into disarray an expansive digital telecommunications deal that Telus pushed ahead with last year in the expectation the government would approve the renaming deal. As a result, negotiators for both Telus and PavCo have to go back to the table to unwind portions of that agreement.

Documents obtained by The Vancouver Sun outline a detailed rebranding strategy for the stadium that would have promoted the tag line “Super, Natural British Columbia” in concert with Telus’ well-known nature image — even going so far as to rename gates after trees and flowers. The deal was so advanced that Telus had spent millions of dollars on signs that were to be mounted externally on the stadium.

But Pat Bell, the minister of jobs, tourism and innovation, told The Sun Wednesday the government killed the deal after it felt the iconic building should retain the name it was born with nearly 30 years ago. He said cabinet was opposed to Telus’ demand that all public reference to BC Place should cease.

“PavCo has terminated their discussions with Telus,” Bell said. “For us the underlying principal came back to the name BC Place. There are many in cabinet and many across the province who believe that name has tremendous value to it and we wanted to retain that.”

“Telus was certainly of the view that they didn’t want any reference to BC Place, and I understand that,” he said. “They felt very strongly about it. Cabinet felt equally strongly in the other direction and in the end we thought it was important to retain the integrity of the name BC Place.”

But in later interviews, Premier Christy Clark and Finance Minister Kevin Falcon said the deal “wasn’t in the best interests of taxpayers.”

“Not every deal is the best deal for taxpayers. This one wasn’t,” Clark said. “The minster’s view and Treasury Board’s view, quite clearly, is that we can get a very good source of revenue on selling the inside advertising at BC Place.”

Telus president and CEO Darren Entwistle was unhappy but said he accepts the decision.

“I think Telus is deeply disappointed with this decision, which we find regrettable. We believe that Telus, our brand, and our 25,000 team members across British Columbia, would have been a great partner for one of the premier sports facilities in all of North America,” he told The Vancouver Sun’s editorial board.

“We respect the decision that has been taken, and Telus will instead focus on operationalizing our unparalleled $3-billion investment in this province and the welfare of its citizens.”

PavCo has long sought to rename BC Place as part of the revenue options for paying down recent renovations, including replacing the iconic air-supported dome with a retractable roof. PavCo Chairman David Podmore said the Crown corporation initially sought companies it thought would want a 25-year branding opportunity. Bell Canada, a sponsor of the Vancouver Whitecaps, turned the idea down. But Telus was interested and put together a bid, eventually negotiating a deal with PavCo for about $2 million a year for 20 years, he said.

Telus said those negotiations directly led it to offer and develop an innovative plan for a sweeping digital technology upgrade of the stadium.

That concept, based around the creation of 800 Wi-Fi access points, 100 new wireless sites and 1,150 high-definition digital screens, would turn the stadium into Canada’s first “all-digital stadium,” putting it on par with Yankee Stadium in New York and Cowboys Stadium in Dallas.

That technology debuted last September when the facility reopened to the public. PavCo had signed a letter of intent with Telus in March 2011 and the upgrades were completed while the two sides waited for the provincial government to approve the overarching naming agreement. Telus would not say how much it has spent on the upgrades, but Podmore told The Sun a portion of the work was bought by PavCo “at cost” with the rest provided by Telus as part of the planned operating agreement.

Bell said the government had already drafted a letter cancelling the deal when Telus announced last week it would invest more than $3 billion in B.C. over the next three years, including $750 million for a new office and residential complex and important and wide-ranging expansions of its digital, wireless and broadband services across the province.

NDP leader Adrian Dix was at the announcement, but Premier Christy Clark was absent in part because Telus had specifically not invited her because they were still in sensitive negotiations and did not want to expose her to questions about the state of the deal, the company said.

Hours after that announcement, Podmore informed Entwistle that the BC Place naming deal had been cancelled.

Falcon said PavCo and Telus could negotiate any arrangement they wanted, but it was up to cabinet to approve the renaming of a public building.

“At the end of the day, they can negotiate the best they can but it’s got to come back and it’s got to be acceptable to government and government makes that decision on a number of areas and it’s got to meet the test of public interest and taxpayer interest,” he said. “After a long negotiation, it was determined that this did not meet that test.”

Podmore said he expects the province to “relieve” PavCo of the need to find $40 million in naming rights now that it has rejected the Telus deal.

But Bell, the minister, said killing the deal now lets PavCo sell advertising sponsorships on the inside of the building that he thinks will amount to more than $40 million over the same 20 year term. “It is too early to tell right now. We will work through the individual advertising agreements to see what emerges,” he said.

Podmore would not discuss what the value of a new contract with Telus for its completed work may be. Telus said it would likely be weeks before a revised deal is finalized.

New Democratic Party leader Adrian Dix was highly critical of the way government has handled the negotiations. When a company spends millions on signage for a building, they expect they have a deal, he said.

“This is just ineptitude, business ineptitude on the part of the Liberal Party,” he said. “They [the government] engaged in this process. Clearly they decided to do it. There was a belief, presumably, on the part of the largest private sector employer in the province that they had a deal,” he said.

“Then the government has decided now, it says, that it changed its mind. Isn’t that incompetence? Isn’t that pure Liberal incompetence?”

Whitecaps president Bob Lenarduzzi wouldn’t comment on the cancellation of the naming rights deal but it will clearly be easier now for the club to keep calling the field of play at BC Place the “Bell Pitch” – in recognition of Telus competitor Bell, a major Whitecaps sponsor.

BC Place general manager Howard Crosley recently said the Whitecaps’ lease with PavCo didn’t specifically state the club could name the field after Bell and the two sides discussed the issue while Telus loomed as a likely naming rights holder.

B.C. Lions president Dennis Skulsky said he was surprised by the decision to cancel the Telus naming rights deal. Telus is a major Lions sponsor.

“We were very excited about the opportunity to have one of our partners – a strong company with B.C. roots – working to be part of a naming rights program,” he said. “We’re a little surprised but at the end of the day, it sounds like the government has their rationale as to why they didn’t go in this direction.”

Skulsky likes the name BC Place but noted stadiums around the world now commonly embrace corporate names.

“I respect the decision because a lot of money has been put into the stadium and, as a taxpayer in the community, that building is BC Place,” he said. “I don’t know how you measure the value of BC being part of that name but the province must feel there’s some good value in that.”

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